Facebook Messenger Payments

When you chat with friends about settling debts or splitting the bills, Facebook doesn’t want you to to launch another app like PayPal or Venmo to send them payments. So today, it’s unveiled a new payments in Facebook Messenger that lets you add your Visa or Mastercard Debit card and tap a “$” button to send friends money on iOS, Android, and Desktop with zero convenience charges. Facebook Messenger payments will be rolled out first in the U.S. end of this month.

Facebook and PayPal: Partnering?

Rather than incline on a payments companies like PayPal to empower the feature, Facebook built it from the bottom up from its experience dispensation over 1 million payments a day through its ads and games platforms. Transactions and payment info are fully encrypted, and Facebook says, “These payment systems are reserved in a secured environment that is split from other parts of the Facebook network and that receive added monitoring and control,” from an anti-fraud team.

Pay Settings

By making payments division of its often used instant messaging service rather than a standalone app, Facebook is looking to cutting edge dedicated P2P payment competitors like Venmo/PayPal, Google Wallet, and Square Cash, which is people open less habitually. That’s the same strategy as the Square Cash-powered Snapcash feature Snapchat introduced in November.

PayPal gave a statement (emphasis mine) saying:Payment Settings

We have had a great relationship with Facebook since 2008 and presently work closely together to deliver easy payments options on a global scale for its games and ads businesses.
PayPal has always taken a partnership approach to payments and we will continue to work with Facebook and many other companies on new payments experiences that make it easier for people to send and receive money on both the PayPal and Braintree payment platforms.

When I asked a PayPal representative if the company views Facebook Messenger payments as a “competitor,” they carefully avoided that word but ultimately admitted “it does have similar technology and does a parallel thing to what Venmo does.” While Venmo makes transfers with most debit cards for free, Facebook free payment service will undercut PayPal’s 2.9 percent plus $0.30 fee per transaction from all debit cards.

“We’re not making a payments business here,” Facebook’s product manager on the feature Steve Davis told. Instead, Davis says the goal is to offer P2P payments for free to make Messenger “more useful, expressive, and delightful.” Since Facebook makes so much money on ads, $3.59 billion in Q4, it doesn’t have an option to monetize payments instantly. Facebook just requires keeping people locked into its platform and watching News Feed ads by making Messenger as helpful as possible.

Payments in Messenger

Facebook is making peer-to-peer payments system into Messenger back in October when we attained hacked screenshots dug out of Messenger’s code by developers. Since then, I’ve heard from several sources that Facebook was doing powerful internal testing of the feature.

In the meantime, Facebook teamed up with PayPal, Braintree and Stripe to power auto-fill of billing details for e-commerce checkouts, and built a Buy button for making purchases from the News Feed.

Davis says the product evolved from a different initial manifestation but was cautious about exactly how long Facebook has been functioning on the feature. He did note that it was well in the works when the company poached PayPal president David Marcus to run its Messenger partition.

“We wanted to test this feature and make sure we had really hit a high bar because money is extremely important.” Now its payments in Messenger are ready for a regular public rollout stateside. Here’s how it works.

Once users get the feature, they’ll see a “$” button in the Facebook Messenger message composer next to the options to send a photo or stickers. When they tap it, Facebook will ask them to enter add their debit card info. Users won’t have to swindle with finding and entering bank account and routing info, making it easier than other alternatives, but they can only use Visa and Mastercard Debit Cards. Facebook decided next to allowing credit cards because they would entail fees and it didn’t want users to get charged if they didn’t understand.

For additional security, users are prompted to set an in-app payments passcode or Apple TouchID fingerprint to confirm transfers, although they can opt out of this additional authentication in the settings. If users have a debit card attached in their account with Facebook from gaming, ads or donations, they can able use existing card, too.

Once the $ button is tapped, users enter the dollar amount and hit Pay. The money is instantly taken from their debit account and delivered to the recipient’s account. Facebook will never hold the money, though the receiver’s bank will usually take a few days to make the funds available as per community standards. Both users can see a confirmation messages detailing the transfer status and time.

In case something looks fishy, Facebook will ask users for some additional financial security questions before a transfer goes through. Later, users can check all their previous payments and funds received in the Payments History section of Messenger’s settings.

“It’s obviously not a feature you’re going to use it for 10 times a day,” say Davis. “But when you do need to send money, this is probably going to be the best way to do it.”

Convenience is King

Davis says, that “conversations about money are already phenomenon on Messenger,” as people chat about bar tabs, splitting dinner bills, and sharing the cost of an Uber. “What we want to do is make it easy to finish the conversation in the same place where you started. You don’t have to switch to another app,” for payments.

Now the question is whether this is the first step towards Messenger becoming a more full-featured experience including payments options. Facebook Messenger could follow the movement of monolithic chat apps of Asia like WeChat that let you make payments, e-commerce purchases, hail taxis and much more. Messenger is going to have announcements at next week’s f8 developer conference, and we could see more platform ambitions from it then.

While only in the U.S. for now, if Facebook opened up Messenger payments internationally, it could help migrant workers send money home much cheaper than through high-fee remittance services. But for now, Facebook says, it just wants to get friend-to-friend payments right in the States. “We’ll deem where to take it after that once we get everything nailed down,” says Davis.

When people’s money is at stake, there’s no room for bugs.


  1. I can definitely see how this could be very convenient to use. Especially when you don’t have to time to go to an atm and need to get someone money fast.

  2. I have use this a couple of times that I am telling you it is the best thing ever. Address right into your account and it is ready to spend immediately.

  3. I have used PayPal as far back as I remember and I believe in their services and safety. If they are partnering with facebook, I would be confident to give it a try. It will make things so fast and easy!

  4. I had not heard of this but it would be interesting way to get money to my older daughter when she was in a jam.

  5. I love the idea when it comes to sending money to my kids. My daughter has a PayPal so that is how we do it with her at school but my other 2 kids IF they needed money do not so this would be a great way to do so if they weren’t where I could get to them. Thank you for the useful information.

  6. I’ve noticed that paypal now sends me receipts on messenger. What a great service, since I use paypal for so many of my transactions!

  7. This is perfect for helping the kids out when they fall short on bills. It gets to them faster than through the mail and less of a hassle than taking the check to the bank and waiting for it to clear. I love this!

  8. This sounds like it would be so easy. Such an easy way to make a payment to someone when you are chatting with them.

  9. Facebook never ceases to amaze me with what they are rolling out with next. This seems like such a good idea with all the businesses that market there.

  10. My neighbor owes me $500. Well, former neighbor – he moved away shortly after taking off with my money. Grrrr. We’re still Facebook friends, so this service might come in handy.

  11. This is super interesting. I didn’t know that Facebook could do this. I’ll definitely be looking into this some more, thanks for sharing!

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